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Republic of the Philippines

Depafirnent of Finance
BURtrAU OF {NT'ERNAL REVENUE
Quezon City

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.lanuarv 12.2016

REvtiNuE MtrMoRANEUL,g c{F{cLIlAR

No. Q

2'D I i,,

SL]E}J['CT

Ciarific:rtion on Taxatrility +f fdon-Stock S:tvings amci Loan

Associations for Furposes ofl Xncome T:lx, (iross Iteceipts T;lx
:rnd tr)ocumentary Stztrrnp Tax

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All Revenue Otficials, Ilmployees and Other Concerned

'fhis Circular is issued to claril,v the taxability of Non-Stock Savings and Loan Associations
f\5--:iLAs) r"or incorle. r,alue-added ancl docuil"'ntat-v stamp tax purpo:;es.
tsACKGR.OUNI)
Under -lection 3 of l{epublic Act (RA) No. 8367 " ot}reru,ise knou'n as "Revised Non-Stoc1<
Sarings and Loan Associalion Act of 799J", Non-Stock Savings and Loan Associations (NSSl,Asl
shall mean non-stock. non-profit corpolation engaged in the business of accumulating the savings of
its rrrcnrbers and using such accurluiations lot'loans to metnbers to selvicc thc necds of irouseholcls
bv proritlin-u long lernr finanoing 1br houre building and develclpment and for personal finance. For
regtrlatorl, plrq)oses. NSSLAs ale under the direct supenision and regulation of the Bangko Sentral
ng Pilipinas (BSP). Thev are classified as Non-baitk Financjal Iniemrediaries (NBFIs)',rnder the
BSP l\:ianual cf Regulations.

{1\COME T'AX
Pulsuant to Section 5 of RA No. 8367" NSSI-A shall be exenrpt from inconre tax rvith respecl
to income it receives. inclnding intercst on its deposits with an-r,bank. However, anv inconre derivcd
b,r, i1 fi'om any, of its properties, real or personal. or anlr activit},.conducted 1or profit. r-egardless of 1i-re
disposition thereoL is sub.ject to the applicable incorne tax ancl other internal revenrre tares irnposed
under the 1997 Na.1ional Intcmal Rcvenue Codc (NJi{C). as anrended.

Thus, any disposition made by NSSLAs of its properties (rea1 or personal) is subject to the
applieable income tax depending,on the classification of its properties either capital or ordinary asset.

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GR.OSS RECET}]TS

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Section 4 of RevenrLe Reguiations (RR) No. 9-2004, as anteuded, implementing Section 122

of the NIRC, as amended, provides fol the imposition of Gross Receipts Tax (GRT) on NBFIs.
Section 4 of RR No. 9-2004 reads:

4.

IMPOSITIO|V AF G,t#,S^S R.ECEIPTS TAX ON OTIIER NONBAI\{K FIMNCIAL II{TERM{EBM,ffifE^S. Gyoss receipts of other non-bank
.financial intermediaries (non-bank financiol inlerntediary not perJbrming quasi-banking
functions) doing business in the Philippines shcll be subject to GRT at rates and on
"SEC.

itents of income provided hereunder:

(a)

From interest, cotttntissions, discounts and

all ather items treated as gross income
under the

(b)

Code

------------- 5%

On interest, contntissions and discounts

from lending acti:tities' as v,ell as income
frorufinancial leasing, on the basis of
remaining maturities of the instruments -fiom
v,hich such receipts are derived:

Maturity period is five (5) years or less

Maturity period is more thanfive (5) years

--------- 5%
----- 1%

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)'lothing in these Regulations shall preclude fhe Commissioner front impo,s'ing the
saftle tax herein provided on persons' performing sirnilar activities. "

As a NBFI, NSSLA is generally subject

unless othenvise exempted under special rules.

to GRT on income derived from its

operations.

DGCUMENTAIT.Y STAMP TAX

As provided under Section 5 of RA No. 8367. NSSLA is only exempt liom income tax.
Thus, NSSLAs as NBFis are subject to Documentary Stamp Tax (DST) under the provisions of RR
No. 13-2A04 irnpiementing Title VII of the NIRC. as amended, particularly on loan agreements,
mortgages, pledges, foreclosures and sales) among others.
IIIIBEAU f;i il,T'iril,'i,:, Iiil{i,Xfi
IIECORIIS I',iG'L'. ij j r'ii)"tCijt

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Pursuant to RR No. 9-2000, whenever a NSSLA is one of the parties to a taxable transaetion,

the NSSLA shall be responsible for the remifiance of the DST due regardless of who witri bear the
burden of paying the DST.

Any issuances contlai"y to the provisions contained herein are null and void for being conttarl'
to the provisions of RA No. 8367 and the NIRC. as anrended.

- Ali rcvenue officers znd employres mrhereby enjoined to -gi-ve this Circularas--widepublicity

as

possible.

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E{ENARES
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C onrmis sioiier. of Internal Revenue

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